Capital Market Structuring Department September, 2021 Market Note ANALYST CERTIFICATIONS AND REQUIRED DISCLOSURES BEGIN ON PAGE 8 Pension funds: the only net buyers for August August showed a different dynamic in the market. Flows were mostly on the buying side and from pension funds. The net amount reached COP392.8 bn. Flows from pension funds represented 24% of total flows for the month. Capital Market Structuring Department During August, the most purchased shares were Grupo Aval pref. (COP180.7 bn), Ecopetrol (COP170.06 bn), and the iColcap ETF (COP85.4 bn). In Investment Solutions Management contrast, the best sellers were Bancolombia pref. (COP72.55 bn), the iColcap [email protected] ETF (COP57.88 bn), and Corficolombiana (COP34.62 bn). Foreigners were once again net sellers. Their net amount reached COP306.6 bn. Their total flows represented 30% of total flows for the month, 7% below July’s. Amongst the most sold shares were Ecopetrol (COP234.83 bn), Grupo Aval pref. (COP225.08 bn), and Bancolombia pref. (COP105.49 bn). On the COLCAP Evolution Last 12 Months other hand, regarding buying flows, Bancolombia pref. (COP178.39 bn), volumen USD Colcap Ecopetrol (COP99.98 bn), and ISA (COP47.8 bn) top the list. It should be 200 1600 noted that the selling amount was largely due to the cross in Grupo Aval 1500 pref. on August 13 (COP142.7 bn). 150 1400 Individuals were net sellers in the month with a net amount of COP29.33 bn. 1300 Bancolombia pref., Ecopetrol, and Bancolombia ord. posted the most 100 1200 representative sales, with flows of COP73.09 bn, COP72.22 bn, and Points US$mn 1100 COP23.74 bn, respectively. Finally, regarding the stake in the trading rounds, the most relevant shares were reached by foreigners (30%), pension 50 1000 funds (24%), and broker-dealer companies (21%). 900 0 800 In August, the Colcap Gained 6.7% Aug-20 Oct-20 Dec-20 Feb-21 Apr-21 Jun-21 Aug-21 During August, the Colcap gained 6.7%. The shares that presented the Source: Bancolombia, BVC, Bloomberg. highest valuations were Bancolombia ord. (14.6%), followed by Davivienda (13.6%), and Bancolombia pref. (12.9%). In contrast, Exito (-3.3%), Corficolombiana (-2.5%), and CLH (-1.1%) posted the largest losses. During the month, the completion of the transaction between Ecopetrol and ISA Most Traded Shares On May (USD mn) was the most relevant news in the market. Markets in the region showed mixed performances. The Brazilian market Ecopetrol 131 posted losses, falling 2.5%, along with the Peruvian market, down 0.1%. In contrast, the Chilean and Mexican markets rose 5.6% and 4.8%, respectively. PF Bancolombia 98 During August, the daily trading of the local market averaged COP102 bn (- PF Aval 75 4.4% YoY and 24.4% MoM). ICOLCAP 42 In the ranking of the most traded stocks, Ecopetrol remains first, with a ISA 40 volume of COP501.68 bn, followed by Bancolombia pref., with COP374.48 Grupo Sura 25 bn. Finally, reviewing the investment limits of pension funds, the portfolio Bancolombia 24 with the highest risk has a gap of 6.4%, the moderate one 0.2%, and the Corficol conservative one 0.0%. 23 PF Davivienda 17 Cementos Argos 15 Source: Bancolombia, BVC, Bloomberg. Table 1. Transactions (USD mn) Market Participants Evolution Brokerage Firms Foreigners Individuals Pension Funds Real Sector Others Buyers Sellers Total Participation 100% 6% Real Sector 30 34 (3) 5.7% 6% 80% Foreigners 127 207 (80) 29.8% 24% Pension Funds 186 83 103 23.9% Brokerage Firms 111 122 (11) 20.8% 60% 14% Individuals 75 83 (8) 14.1% 40% Others 13 14 (1) 2.4% 30% Collective Portfolio 16 10 6 2.3% ADRs - - - 0.0% 20% Funds 3 8 (6) 1.0% 21% Total 561 561 100.0% 0% 11 12 13 14 15 16 17 18 19 20 21 - - - - - - - - - - - Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Source: BVC, Bloomberg. Fuente: BVC, Bancolombia Market Winners and Losers – Mar. Table 2. Accumulative Net Flows (USDmn) Bancolombia 14.6% USD mn 1M 3M YTD 12M Pension Funds 102.5 197.0 320.4 513.0 Davivienda PF 13.6% Foreigners (80.0) (193.4) (539.3) (747.1) Brokerage Firms (11.0) (28.9) (17.6) (61.2) Bancolombia PF 12.9% Individuals (7.7) (6.7) 96.2 102.3 Real Sector (3.5) 8.2 71.8 71.1 COLCAP 6.7% USD mn 2 years 3 years 5 years 10 years CLH -1.1% Pension Funds 1,603.7 2,400.8 3,888.2 4,391.3 Foreigners (1,837.6) (2,424.5) (2,167.1) 788.0 Corficol -2.5% Brokerage Firms (451.0) (443.4) (435.0) 61.6 Individuals 183.3 (7.1) (824.1) (3,523.5) Éxito -3.3% Real Sector 84.9 (19.4) (1,101.6) (2,583.8) -5% 0% 5% 10% 15% 20% Source: Bancolombia, BVC Source: Bancolombia, BVC Table 3. Most Bought and Sold Names by PF (USDmn) Table 4. Most Bought and Sold Names by Foreigners (USDmn) Top Bought Top Bought 3M 6M 12M 3M 6M 12M Grupo Aval PF 90.4 Grupo Aval PF 104.4 Ecopetrol 170.4 Cementos Argos 11.4 Grupo Bolívar 17.5 Grupo Bolívar 16.9 Ecopetrol 75.9 Ecopetrol 98.1 Grupo Aval PF 133.8 Bancolombia PF 5.4 Canacol Energy 9.1 Cementos Argos 11.3 ISA 13.8 GEB 35.3 Davivienda PF 45.6 Bancolombia 2.9 Cementos Argos 7.9 Canacol Energy 6.5 Corficolombiana 13.4 Corficolombiana 25.1 GEB 39.9 Avianca Holdings 1.3 Avianca Holdings 1.5 Hcolsel 4.8 Top Sold Top Sold 3M 6M 12M 3M 6M 12M Cementos Argos (8.6) Hcolsel (10.2) Grupo Sura (21.5) Grupo Aval PF (103.2) Ecopetrol (110.9) Ecopetrol (210.1) Hcolsel (4.1) Grupo Sura (6.4) Cementos Argos (9.1) Ecopetrol (68.4) Grupo Aval PF (107.2) Grupo Aval PF (140.5) Icolcap (3.2) Celsia (4.2) Hcolsel (7.5) Corficolombiana (14.2) GEB (67.4) GEB (75.7) Grupo Sura (2.3) Grupo Bolívar (3.6) Promigas (6.5) Davivienda PF (5.6) ISA (31.9) Davivienda PF (49.6) Source: Bancolombia, BVC Source: Bancolombia, BVC Foreigners’ Evolution (USDmn) Pension Funds’ Evolution (USDmn) 100 250 50 200 0 150 (50) 103 100 (100) (80) 50 USD mn (150) USD mn 0 (200) (250) (50) (300) (100) 18 19 20 21 17 18 19 20 21 17 18 19 20 21 18 19 20 21 - - - - - - - - - - - - - - - - - - Feb Feb Feb Feb Feb Feb Feb Feb Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Source: Bancolombia, BVC Source: Bancolombia, BVC Real Sector’s Evolution (USDmn) Individuals’ Evolution (USDmn) 100 80 50 60 0 40 (3) (50) 20 (100) 0 USD mn USD mn (150) (20) (8) (200) (40) (250) (60) (300) (80) 17 18 19 20 21 17 18 19 20 21 18 19 20 21 18 19 20 21 - - - - - - - - - - - - - - - - - - Feb Feb Feb Feb Feb Feb Feb Feb Aug Aug Aug Aug Aug Aug Aug Aug Aug Aug Source: Bancolombia, BVC Source: Bancolombia, BVC Average Monthly Volume (USDmn) Pension Funds’ Investment Portfolio Evolution Domestic Fixed Income Foreing Fixed Income Domestic Equities Foreing Equities Others 90 2019 2020 2021 100% 75 19% 80% 60 32% 60% 45 41 US$ mn 13% 28 40% 30 27 5% 20% 15 32% 0% 0 13 14 16 17 18 19 20 21 15 - - - - - - - - Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec - Jul Jul Jul Jul Jul Jul Jul Jul Jul Source: Bancolombia, BVC Source: Bancolombia, Superintendence of Finance *Data as of march, 2021 Foreigners’ Movements (USDmn)* Pension Funds’ Movements (USDmn)* PFBCOLOM 19.0 PFAVAL 43.6 CEMARGOS 4.7 ECOPETROL 39.5 ICOLCAP 1.0 ICOLCAP 7.2 CORFICOLCF (5.6) GRUPOSURA (0.7) ECOPETROL (35.2) CEMARGOS (4.7) PFAVAL (49.6) PFBCOLOM (6.0) (60) (40) (20) 0 20 40 (10) 0 10 20 30 40 50 Millions Millions Source: Bancolombia, BVC Source: Bancolombia, BVC Real Sector Movements (USDmn)* Individuals’ Movements (USDmn)* HCOLSEL 2.1 PFAVAL 6.2 PFDAVVNDA 1.4 CORFICOLCF 1.8 NUTRESA 1.2 ECOPETROL 1.4 GEB (1.3) PFDAVVNDA (1.9) ISA (2.6) BCOLOMBIA (3.8) PFBCOLOM (3.9) PFBCOLOM (11.0) (5) (4) (3) (2) (1) 0 1 2 3 (15) (10) (5) 0 5 10 Millions Millions Source: Bancolombia, BVC Source: Bancolombia, BVC Table 5. AFP’s Equity Investment Limits per Fund Investments in equity securities National Maximun AFP Fund Type Total Local Gap Total Gap From national issuers From foreign issuers Limit Limit Low Risk 6.2% 13.7% 19.8% 15.0% 20.0% 8.8% 0.2% Protección Moderate 12.7% 32.2% 44.9% 35.0% 45.0% 22.3% 0.1% High Risk 18.1% 44.8% 62.9% 45.0% 70.0% 26.9% 7.1% Low Risk 6.3% 13.5% 19.7% 15.0% 20.0% 8.7% 0.3% Porvenir Moderate 12.1% 32.1% 44.3% 35.0% 45.0% 22.9% 0.7% High Risk 19.1% 45.1% 64.2% 45.0% 70.0% 25.9% 5.8% Low Risk 6.1% 16.8% 23.0% 15.0% 20.0% 8.9% -3.0% Skandia Moderate 13.5% 32.9% 46.4% 35.0% 45.0% 21.5% -1.4% High Risk 17.8% 47.7% 65.5% 45.0% 70.0% 27.2% 4.5% Low Risk 6.2% 13.7% 19.9% 15.0% 20.0% 8.8% 0.1% Colfondos Moderate 13.4% 32.0% 45.4% 35.0% 45.0% 21.6% -0.4% High Risk 18.1% 44.2% 62.3% 45.0% 70.0% 26.9% 7.7% Low Risk 6.2% 13.8% 20.0% 15.0% 20.0% 8.8% 0.0% Sistema Moderate 12.6% 32.2% 44.8% 35.0% 45.0% 22.4% 0.2% High Risk 18.5% 45.0% 63.6% 45.0% 70.0% 26.5% 6.4% Source: Bancolombia, Superintendence of Finance *Data as of march, 2021.